Same old story: New Jerseyans have been protesting high taxes for a long time. Here, a 1990 tax protest in Trenton.Star-Ledger file photo

At least we’re not New York.

New Jersey once again has been declared one of the least-friendly states in the nation when it comes to business taxes. The Tax Foundation, a non-partisan Washington D.C. group, ranked New Jersey 49th on its annual index of state taxation, in a report released today.

On the plus side, the Garden State’s ranking improved slightly over the group's 2012 report, when it was 50th. New York state captured that distinction this year.

But the state could end up slipping back to last place, the report’s authors note. New York Gov. Andrew Cuomo recently formed a tax relief commission, they wrote, and should the Empire State see through even “slight improvements” to its tax system, it could end up moving ahead of New Jersey on the index.

A spokesman for Gov. Chris Christie's reelection campaign said, "This is exactly why Governor Christie has been fighting for tax relief for New Jersey families and businesses since taking office."

A business group quickly pounced on the findings. The National Federation of Independent Business called the latest ranking a “distinction by which officials in Trenton should be embarrassed.”

“The good news is that we’re no longer dead last. The bad news is that there are still 48 states that are better for business,” NFIB state director Laurie Ehlbeck said in a statement. “Tax relief hasn’t been a high priority for this Legislature and next year that has to change.”

However, the liberal-leaning New Jersey Policy Perspective said the report’s ranking of New Jersey and New York showed there’s not necessarily a connection between a state’s tax rates and its ability to create wealth and jobs.

“New Jersey’s recovered about half the jobs it lost in the recession, while New York has recovered all of them – and added more to boot,” Gordon MacInnes, NJPP’s president, said in a statement.

For New Jersey, the group found the state fares slightly better on unemployment insurance taxes (ranked 32nd). But it is dead-last when on property taxes (50th), and near the bottom on corporate rates (41st), personal income taxes (48th) and sales tax (46th).

The Tax Foundation noted that the state’s top corporate tax rates are 9 percent, or more than the 7.1 percent paid in New York. New Jersey imposes some of the highest top marginal rates, or 8.97 percent, on personal income, and some of the highest effective property taxes (5.34 percent).

The group also dinged New Jersey because it is among five states that don’t use federal government’s definition of income as a state tax base, and said its use of things like the so-called marriage penalty in personal income taxes creates an “unnecessary drag” on the economy.

At the other end of the spectrum were Wyoming, ranked number one in terms of taxes; South Dakota (2); Nevada (3); Alaska (4); and Florida (5).

What separates the best and the worst states? Doing without a major tax – such as personal income or corporate levies – is one factor contributing to those that have landed at the top of the index, the authors wrote. Meanwhile, those that have near the bottom all have complex tax structures with relatively high rates, they said.

But all is not lost for those at the bottom of the list, the authors said. They note that North Carolina, ranked 44th this year, has undertaken a comprehensive reform of its tax system, which could end up vaulting the state up to 17th in the rankings in the coming years if the reforms hold.